SEC may Reinstate Uptick Rule
- Thread starter listedguru
- Start date
I agree with everything you said except the naked short selling bit.
If the logic of disallowing naked short selling is that it exceeds the float, then we should also disallow commodity futures because the number of obligations to deliver outstrips the supply of (insert your favourite commodity here) at any given time.
In addition, to discharge their duties as market makers & specialists, this group is allowed to short naked and always has been. So, all disallowing naked short selling really does is decide WHO gets to short. It puts the customer at a disadvantage relative to the MM & Specialist, much like the uptick rule.
Quote from dtrader98:
Notice the 80A collar rule was put in place as a protection mechanism as a direct result of the 87 crash.
Guess what other rule was simultaneously removed right before this debacle?
Couldn't have picked a better combination to exasperate a crash if you wanted to.
I'm sure it was just a coincidence.
Bingo!
We have a Winner here!
Well the big meeting is tomorrow. Here is what they will be discussing. Doesn't sound too promising...
U.S. SEC to consider about 4 short sale proposals - Reuters.com
Reuters.com reports U.S. securities regulators will consider about 4 proposals to restrict short selling, a type of investing blamed for accelerating the severe downturn in financial services stocks. Proposals the SEC will consider at its Wednesday meeting include the restoration of the "uptick rule," which allowed short sales -- a bet that a stock's price will fall -- only when the last sale price was higher than the previous price, the chief of the SEC said. "We are going to put forward about four different proposals, and one of them does include the original (uptick rule)," SEC Chairwoman Mary Schapiro told reporters. "There are different modified versions because the markets have changed a lot, even since 2007." Schapiro said other proposals on the table include a so-called "bid test" and a "circuit breaker." One source familiar with the matter said the SEC bid test proposal would only allow shorting at a price above the highest available bid. The SEC also is crafting two circuit breaker proposals: One would temporarily halt short sales of a stock if the stock has already fallen by a certain percentage, the source said. The other would trigger the application of an uptick rule or bid test after the price of a stock experienced a decline by a certain percentage, such as 10%, the source said.
U.S. SEC to consider about 4 short sale proposals - Reuters.com
Reuters.com reports U.S. securities regulators will consider about 4 proposals to restrict short selling, a type of investing blamed for accelerating the severe downturn in financial services stocks. Proposals the SEC will consider at its Wednesday meeting include the restoration of the "uptick rule," which allowed short sales -- a bet that a stock's price will fall -- only when the last sale price was higher than the previous price, the chief of the SEC said. "We are going to put forward about four different proposals, and one of them does include the original (uptick rule)," SEC Chairwoman Mary Schapiro told reporters. "There are different modified versions because the markets have changed a lot, even since 2007." Schapiro said other proposals on the table include a so-called "bid test" and a "circuit breaker." One source familiar with the matter said the SEC bid test proposal would only allow shorting at a price above the highest available bid. The SEC also is crafting two circuit breaker proposals: One would temporarily halt short sales of a stock if the stock has already fallen by a certain percentage, the source said. The other would trigger the application of an uptick rule or bid test after the price of a stock experienced a decline by a certain percentage, such as 10%, the source said.